Stocks post back-to-back losses as oil surges, 10-year yield hits 19-year high: Live updates

The three major averages ended Tuesday’s session with losses.

The S&P 500 fell 0.45% to end the day at 7,585.73, while the Nasdaq Composite dropped 0.78% to 25,981.57. The Dow Jones Industrial Average shed 328.09 points, or 0.63%, to 52,093.11.

— Sean Conlon

Leaders of big technology firms are saying they want to slow the pace of advancement in large language models due to safety concerns, but Wall Street is still sounding mostly bullish on the sector.

“If the frontier labs truly believe AI is powerful enough to pose an existential threat, then AI must also be powerful enough to solve some of humanity’s largest problems,” Benjamin Bowler wrote in a Tuesday note to clients. “AI’s potential is rising as fast as its risks, motivating the need for risk-managed upside exposure to US equities.”

— Tobias Burns

After last week’s CPI and PPI reports, there is a 90% probability that the Federal Reserve will raise interest rates in their upcoming meeting tomorrow, according to a recent note from Wolfe Research.

“While we are less hawkish than consensus on the Fed hiking tomorrow (we put at odds 50-50), Chair Warsh is a wildcard given the Fed’s newfound lack of forward guidance,” according to Wolfe’s analyst, Chris Senyek.

According to Senyek, if the Fed follows the futures market and hikes the rates, then the stocks could see a downward pressure over the near term, based on price action following the first rate hike in prior cycles.

Wolfe research team has found that stocks typically recover and push into positive territory over 6 to 12 months after the first rate hike.

“Despite potential equity market weakness, we do not believe that this will mark a “top” for markets,” Senyek said in a note, adding that the technology sector can continue to work, given tailwinds from AI megatrends, very strong earnings results, and a resilient U.S. economy.

— Deena Zaidi

Rick Rieder, BlackRock’s Global Fixed Income chief investment officer, expects the Federal Reserve to increase interest rates on Wednesday — although he doesn’t necessarily agree with the move.

“I wouldn’t [hike rates],” he said in an interview with CNBC’s “Halftime Report. “[M]oving the funds rate 25 basis points — Are you really going to do anything for inflation? What’s driving inflation today is interest rate insensitive. Obviously, you’ve got war, you’ve got energy prices, you’ve got education, insurance costs, healthcare. It doesn’t really do much.”

While he is still underweight long-dated bonds, he has “dabbled a little bit” and added exposure. Those investors who want to follow suit should be cautious, he warned.

“When the 10-year [Treasury yield] hits 5%, 95% of the time in history when it does, it’s a really good forward investment environment in terms of buying interest rates,” he explained. “That being said, I still think rates could move a bit higher, assuming they hike.”

What he really likes right now is the very front end of the curve.

— Michelle Fox

Crude oil prices rose Tuesday as traders awaited updates on how long Saudi Arabia’s critical East-West pipeline will be closed.

Brentcrude futures, the international benchmark, were up 3% to $108.88 per barrel by 1:00 p.m. ET. U.S.West Texas Intermediatetraded 4.7% higher to $106.12. Prices have surged around 20% this month as fighting has sharply escalated in the Persian Gulf.

Read the full story here.

— Spencer Kimball

The State Street Utilities Select Sector ETF (XLU) hit a fresh 52-week low Tuesday, falling 1% to $41 per share. That’s its lowest level since Sept 2025.

The sector is getting hit as a 5% 10-year Treasury bond yield gives them competition by making their dividend yields less attractive.

Big utilities names including NRG Energy, Exelon, CMS Energy and PSE&G are all hitting at least 52-week lows.

— Paulina Likos

Shares of medical device and digital health company, ResMed, advanced nearly 5% Tuesday after RBC Capital upgraded the stock to outperform from sector perform.

The firm also increased its price target on the stock to $262 from $244, implying a 17% upsidefrom its current price of $229 apiece. ResMed, known for its treatments for sleep apnea and other breathing disorders, recently reported an upbeat fourth quarter earnings in August, delivering better-than-expected sales in its core sleep devices segment.

ResMed’s “positive earnings outlook” and “increased focus on capital management” gave RBC confidence to re-rate the stock higher. The firm forecasts ResMed can achieve high single digit earnings growth in the coming years.

— Paulina Likos

Despite Bank of America forecasting a weak third quarter, and the stock slipping over 5% Monday in response, Morgan Stanley expects a rebound in the fourth quarter and sees the stock’s reaction as overdone.

“Weaker capital markets activity in 3Q drove a cut to the full-year operating leverage guide, but >5% stock decline was significantly higher than our 1.5% EPS cut,” said Manan Gosalia, Morgan Stanley’s equity analyst, in a note to clients on Tuesday.

The analyst said that third-quarter investment banking fees are expected at $1.6 billion to $1.8 billion, down about 11% to 21% from a year earlier. Third-quarter expenses are expected at $18.6 billion, compared with Morgan Stanley’s consensus estimate of $18.3 billion.

Still, Gosalia expects operating leverage to return in the fourth quarter, while maintaining a target of 200-300 basis points of sustainable operating leverage.

Morgan Stanley has an overweight rating for Bank of America and expects the company to exceed 2025 investor day targets. Gosalia gave the company a $67 price target, implying a nearly 12.7% upside from Monday’s close.

— Ananya Chetia

Wells Fargo is skeptical the stock market can continue marching much higher from current levels.

Strategist Ohsung Kwon trimmed his year-end S&P 500
target to 7,700 from 7,950. That implies just 1% upside from Monday’s close of 7,619.98.

″[We] believe we’re entering late innings of the cycle, arguing for multiple compression,” Kwon wrote in a note Monday. “We see 5-10% downside risk” before the S&P 500 reaches his new target, he added.

A 5% decline would take the benchmark index to 7,239, a level it hasn’t traded at since June.

A 10% slide would knock the S&P 500 all the way back to 6,858, its lowest since mid-April.

CNBC Pro subscribers can read more here.

— Fred Imbert

The three major averages began Tuesday’s session in the red.

The S&P 500 fell 0.1% just after the opening bell, while the Nasdaq Composite shed 0.2%. The Dow Jones Industrial Average declined 162 points, or 0.3%.

— Sean Conlon

“We’ll never laugh again,” said a young admirer of John F. Kennedy in 1963 as she mourned his sudden death.

“We’ll laugh again,” answered the JFK aide Daniel Patrick Moynihan. “It’s just that we’ll never be young again.”

At the risk of seeming to conflate a president’s assassination with an investment motif, this is where the AI theme sits right now.

There will be cheer and thrills and profits generated by the burgeoning technology in the years to come. But the youthful phase of AI – when promise was unlimited and winners were easy to spot and vastly outnumbered losers – is over. Read more.

— Michael Santoli

It’s not going to be one and done.

A majority of respondents to theCNBC Fed Surveynow forecast at least two hikes over the next one year, with a third predicting three or more. It’s a stark change from last month when just 46% expected a hike ahead. That’s grown to 86% with 55% expecting more than a single hike.

Since last month, Fed Chairman Kevin Warsh delivered a hawkish speech in Jackson Hole, oil prices surged, inflation failed to cool and respondents now seem to believe inflation has spread beyond energy and won’t take care of itself without action by the Fed.

“There is nothing in the data that suggests inflation will return to target ‘soon,'” said Neil Dutta, head of economic research at Renaissance Macro Research. Dutta quoted Fed Governor Christopher Waller, who has said, “Sternly staring at inflation until it melts before our withering gaze is not an option.”

Read the full story here.

— Steve Liesman

Check out the companies making headlines before the bell:

• Dave & Buster’s Entertainment— Shares plunged 17% after the arcade and restaurant company’s second- quarter results disappointed investors. Reported revenue of $544.1 million for the quarter missed the $556.8 million FactSet consensus estimate. Adjusted EBITDA of $98.9 million also missed the expected $120.4 million. The company also posted an unexpected adjusted loss of 27 cents per share, missing the profit of 18 cents a share expected by analysts polled by FactSet.
• Enova International— The online provider of loans and credit services tumbled more than 15% after Enova said it’s withdrawing its regulatory applications for the proposed acquisition of Grasshopper Bancorp. It did reaffirm third quarter and full year guidance and announce an intention that it will accelerate share repurchases.

Read the full list here.

— Sarah Min

Treasury SecretaryScott Bessentwill appear before the House Financial Services Committee on Tuesday for his annual testimony, where he will tout thesuccess of the Iran warand rising wages for the lowest-income Americans. He will likely face questions about issues includinginflation, energy prices, interest rates and thefederal debt.

“The strength of our economy has allowed the United States to wage the greatest economic isolation campaign in the history of the world against the Islamic Republic of Iran and its enablers,” Bessent is expected to tell the committee, according to an advance copy of Bessent’s testimony obtained by CNBC.#

Asia-Pacific markets closed largely in the red on Tuesday.

Japan’sNikkei 225 was little changed at 63,484.1, while the Topix was 0.52% lower, ending the trading day at 4,037.16.

South Korea’s Kospi fell 0.85% to close at 6,627.26, but the small-cap Kosdaq added 0.70% to 812.41.

Australia’s S&P/ASX 200 was down 0.88% at 8,672.5.

Hong Kong’s Hang Seng Index lost 1% to 24,667.24, while mainland China’s CSI 300 fell 0.67% to 4,450.04.

— Lee Ying Shan

Cryptocurrency-related stocks were lower in pre-market trading Tuesday, as Bitcoin fell 2.85% to trade at around $76,826. Ether also sold off, falling 2.7% to just over $2,472.

As of 4:40 a.m. ET, shares of Coinbase were 4.7% lower, while Bit Digital was down by 1.3% and the ProShares Bitcoin ETF was 2.8% lower.

— Chloe Taylor

The U.S. has filed acivil forfeiture complaintagainst $61 million in cryptocurrency that it alleges proceeds from black-market sales of sanctioned Iranian crude oil and petroleum products.

The complaint, brought by the U.S. Attorney’s Office for the Southern District of New York, alleged Tehran used a network of cryptocurrency actors in China and elsewhere to launder more than $1.5 billion in illicit oil money intended to benefit the Iranian military and the Islamic Revolutionary Guard Corps. These proceeds were intended to finance the Iranian government and military components.

“Today we are seizing and seeking to forfeit more than $61 million of the Government of Iran’s money, which otherwise would have promoted hostile military action and terrorist attacks against the U.S. and our allies,” Deputy U.S. Attorney Sean S. Buckley said in a statement.

European equities were in negative territory shortly after the regional opening bell on Tuesday.

The pan-European Stoxx 600 was last seen 0.6% lower, with most sectors and major bourses in the red. Financial services stocks led losses, as the U.S. 10-year Treasury yield breached the 5% mark and markets bet on an interest rate hike from the Federal Reserve later this week.

— Chloe Taylor

Global bonds sold off on Tuesday, after the yield on the U.S. 10-year Treasury hit its highest level since 2007 and rose above 5%.

At 2:45 a.m. ET, yields on bonds issued by the U.K., France, Germany, Japan and were higher. Bond yields and prices move in opposite directions.

As U.S. 10-, 20- and 30-year government bond yields jumped by around 6 basis points, the yield on Japan‘s 30-year yield surged 8 basis points, while the yield on the U.K.’s 20-year gilt added 4 basis points and French and German 30-year bond yields rose by almost 3 basis points.

— Chloe Taylor

This week’s policy decision already presented a dilemma for Chairman Kevin Warsh.

Hike rates and risk the ire of President Donald Trump. Hold rates and risk the ire of the markets for looking out of touch.

And things just got more complicated with the 10-year Treasury yield hitting a level not seen since 2007, oil prices holding above the triple-digit levels, and an AI sell-off wiping trillions of dollars from some of Wall Street’s AI darlings.

Read more here.

— Leonie Kidd

The yield on the benchmark 10-year Treasury note hit a post-2007 peak on Tuesday morning, as it rose above the critical 5% threshold.

At 1:25 a.m. ET, the 10-year yield was trading 6 basis points higher at 5.025%.

U.S. 10-year Treasury yield

Bond yields and prices move in opposite directions, and one basis point equals 0.01 percentage point.

Read more here.

— Chloe Taylor

China’s investment slump deepened and retail sales growth slowed further in August, while industrial output topped estimates with authorities warning of acute supply-demand imbalance at home.

Retail sales grew 0.4% in August from a year earlier, data from National Bureau of Statistics showed on Tuesday, slowing from 0.6% in the prior month and missing economists’ forecast for a 0.8% growth in a Reuters poll.

Industrial output expanded 5.2% last month, accelerating from 4.5% growth in July and outperforming economists expectations for a 4.8% rise.

For the first eight months of the year, urban fixed-asset investment, which covers property and infrastructure investment, shrank 7.2% from a year earlier, steepening from 6.7% decline in the January-to-July period, matching analysts’ expectations.

The urban survey-based unemployment rate in August ticked up to 5.3% from 5.2% in July, and unchanged fromthe same period last year.

NBS spokesperson Fu Linghui attributed the uptick in unemployment to the graduation season, while highlighting stable employment in manufacturing, good prospects for tech jobs and growth in the hospitality and catering sectors.

“We should be aware that the adverse impact of (the) external environment has intensified,” the statistics bureau said in an English-language release. It noted “acute” imbalance domestically between “strong supply and weak demand,” adding that some businesses still faced operational difficulties.

— Anniek Bao and Evelyn Cheng

Oil extended gains Tuesday amid reports of fresh Houthi strikes on Saudi Arabia and attacks by Iran on ships in the Gulf.

Futures for international benchmarkBrent crudefor November delivery gained 1.25% to $107.00 a barrel. U.S.West Texas Intermediatefuturesfor October advanced 1.27% at $102.68 per barrel.

Saudi Arabia closed its critical East-West pipeline that bypasses the Strait of Hormuz, after drones launched from Iraq damaged it, exacerbating oil supply disruptions at a time when the market is already tight.

The Saudi-led coalition in Yemen said 13 civilians were injured on Monday, after Houthi forces launched a wave of ballistic missile and drone attacks into Saudi Arabia, according to Al Jazeera.

— Justina Lee

The benchmark 10-year Treasury yield hovered just below the key 5% level on Tuesday, rising about 3 basis points to 4.988% as selling pressure on U.S. government debt persisted.

The yield briefly crossed 5% on Monday, its highest level since October 2023, before retreating.

Attention is now turning to the Federal Reserve’s policy decision, with markets widely expecting a 25-basis-point rate hike.

Komal Sri-Kumar, president of Sri-Kumar Global Strategies, warned that even a quarter-point Fed hike may not be enough to calm the bond market, particularly as higher energy prices and tariffs add to inflation pressures.

“Even 25 basis point increase on Wednesday may cause the long end yield to increase, cause the 10-year to go significantly over 5% again, and steepen the yield curve,” Sri-Kumar told CNBC on Tuesday.

— Lee Ying Shan

Asia-Pacific markets fell in early trade Tuesday.

Japan’sNikkei 225 declined 0.25%, while the Topix lost 0.24%. South Korea’s Kospi fell 0.43%, and the small-cap Kosdaq declined 0.33%.

Australia’s S&P/ASX 200 was down 0.46%.

— Lee Ying Shan

Asia-Pacific markets were set to open mixed Tuesday, after Wall Street declined as a sell-off in artificial intelligence stocks and elevated Treasury yields weighed on investor sentiment.

Japan’sNikkei 225was poised to fall, with its Chicago and Osaka futures contracts last at 63,185 and 63,220, respectively, compared with the index’s previous close of 63,492.99.

Hong Kong’sHang Seng indexfutures were at 25,028, higher than the index’s last close of 24,917.6.

Futures for Australia’s S&P/ASX 200 last traded at 8,734 compared with the index’s previous close of 8,749.9.

— Lee Ying Shan

Shares for Dave & Buster’s slid over 12% after the company’s second-quarter earnings report.

The company reported $544.1 million in revenue while analysts polled by FactSet expected $556.8 million. Similarly, the company recorded $98.9 million in adjusted EBITDA, missing the consensus call for $120.4 million. Dave & Buster also posted an unexpected adjusted loss of 27 cents per share, while analysts polled by FactSet sought a profit of 18 cents a share.

The company’s reported revenue decreased by 2.4% compared to the second quarter of fiscal 2025.

“We are laser focused on returning to same-store sales and EBITDA growth, sharpening our margin management with cost saving initiatives, generating significant free cash flow, and delivering meaningful shareholder value,” said Darin Harper, the company’s chief executive officer.

— Ananya Chetia